Big score for Mitsubishi Aircraft Corp.

Wed, 2012-07-11 15:00

The relief was palpable on the faces of Mitsubishi Aircraft Corp. (MITAC) president Hideo Egawa and executive VP Masao Yamagami as they told a packed room of reporters at the Farnborough Airshow that SkyWest Inc., the Utah-based regional airline company that operates 20% of the world's regional aircraft fleet, has agreed to buy 100 MRJs for delivery from 2017-2020.

Of course, like much about the MRJ program, there is some fine print. The deal is “an agreement in principle in anticipation of completing a firm order.” But Yamagami said all that's left are some final legal details. “All commercial terms are already agreed,” he told reporters.

This was the blockbuster Western order MITAC desperately needed to lend the program, recently delayed by a year, a massive dose of credibility. Since launching on April 1, 2008, MITAC had managed just 70 firm MRJ orders: 20 from Japanese customers (15 for ANA, 5 for ANI Holdings) and 50 from Trans States, a relatively minor US regional operator that took more than a year to convert its original LOI to a firm order.

So to secure 100 orders from one of the world's leading regional operators—the company is parent to St. George, Utah-based SkyWest Airlines and Atlanta-based ExpressJet Airlines and operates 4,200 daily departures with 725 aircraft—truly is the “milestone” Egawa said it is. MITAC has said its “minimum target” on total lifetime MRJ sales is 1,000 units, a claim that stretched credulity as recently as this morning. But with SkyWest's endorsement Wednesday afternoon, it's much harder to dismiss that ambitious goal.

And those of us who politely nodded while skeptically listening to numerous briefings over the last four years from MITAC officials saying the Japanese aircraft would have genuine traction in Western markets? Well, MITAC has steadily persisted and, with this new deal, some of that skepticism must be put aside. The company still needs to prove it can bring the aircraft to market successfully, but its sales efforts must be afforded new respect.